When you decide to increase prices on residential or commercial accts, what percentage do you use? How often do you increase? or do you never? Thanks:)
Yearly. This year we left things where they were for right now to see what happens w/ the economy.
We raised ours in the high point of the economy scare. so far we have only had one complaint. I would say the first sign to raise is if you can’t make ends meet. I think raising prices will also depend on your location and local market. If you have don’t many competitors you can virtually do what you want as long as your service is worth your price and people will pay for it. We don’t normally raise our prices every year. I have to follow our market and stay close to other companies.
My prices have gone up and I am thinking about going up higher still. I figure why not, it’s what ever I want to make. It might take a little longer to build the clientele the way I want it but once I build it I wont be sorry that I raised my prices.
I figure at 7% a year. I might not raise after a year but may raise rates 2 years later at 14%. This year I have not raised many. If you have a good book keeping system (I use George) you can see when you have raised prices & at what frequency. 7% keeps you above the inflation level.
If my clients keep me, have their windows cleaned at least annually, and refer my services(really just an added bonus), I don’t raise my prices. The majority of my work(99%) is residential. It’s what works for me, my clients are happy, and the business has grown quickly over the last five years.
I don’t have a set schedule, but those that have their customers trained to expect it at certain intervals are definitely doing a good thing. I’ve have been measuring each job by what I’m making per hour and try to adjust accordingly.
With any new bids I’m testing how much the market will pay and slowly trailing these new prices by modest increases to existing customers. I’m constantly surprised at what some people won’t even blink at price-wise that 2 years ago I never would have considered charging, and that in a bad economy.
I have mostly commercial clients. I’m going to raise my prices at least 4% this year to keep up with inflation.
I’m going to raise it as my clients pass the one year mark.
Here are some handy tools to see how much your money has declined in value over the years.
US Inflation Calculator: Click Here
Canada Inflation Calculator: Click here
7% is a general guide for all inflation. Whereas salaries in general may rise 2% & health care say 15% - 7% is the figure you need to have in mind so that you are always be around the right same price in comparisson terms to the original figure you quoted on any one job. 7 is a magical number in all things fiscal. Just ask any stockbroker/bank manager.
I started cleaning windows in 1982. Both resisdential and commercial. The prices in all the markets( SC, CO, MA, TN) I have worked in have not gone up very much in all these years. One thing I can say is the key is to control your expenses. The higher your profit margin the more money you have in the pocket. One of the best things I ever did was to switch to wfp van system for all my accounts both resisdential and commercial. I cut my time by 30 to 40 percent on every account. The key is to set your van system up the right way. This allows me to do lots more jobs in one day which translates into higher profit margins. The one thing I have learned from the British is how to be frugal when it comes to wfp window cleaning.
In Canada we pay our healthcare through our taxes. So that’s not a factor.
But I would have to say that the inflation numbers given by the government probably greatly underestimate inflation. People know that inflation has been high recently with the recent spike in food prices, and gas.
Also if you compare how much more expensive it is to buy a house as it was in the 1970s then you see how high the cost of living is.
Plus in the US they are probably going to get very high inflation soon, since they are “printing” so much money. Buying their own bonds, deficit financing and throwing so much money at zombie companies.
I think 7% is not out of line. I came up with 4% because that is double the goverment’s measure of inflation.
Have you raised prices since 1982? Has the cost of housing increased much since then? How about the price of gas? Food? How about the price of electricity and water?
Consumer goods is a useful measure for measuring inflation but not the only thing that affects the cost of living.
If you haven’t raised prices much since 1982 I think your business is leaving a lot of money on the table and working much harder than it needs too.
Of course it is very important to control expenses and improve productivity but raising prices is also neccessary.
